Syngene International Limited's (NSE:SYNGENE) market cap touched ₹361b last week, benefiting both public companies who own 55% as well as institutions

Key Insights

• The considerable ownership by public companies in Syngene International indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Biocon Limited with a 55% stake
• Recent sales by insiders

To get a sense of who is truly in control of Syngene International Limited (NSE:SYNGENE), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 55% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 3.6% increase in the stock price last week, public companies profited the most, but institutions who own 29% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Syngene International.

Check out our latest analysis for Syngene International

What Does The Institutional Ownership Tell Us About Syngene International?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Syngene International. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Syngene International's earnings history below. Of course, the future is what really matters.

Syngene International is not owned by hedge funds. The company's largest shareholder is Biocon Limited, with ownership of 55%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 6.3% of the shares outstanding, followed by an ownership of 3.0% by the third-largest shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Syngene International

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of Syngene International Limited. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹1.1b worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Syngene International. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 55% of the Syngene International shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Syngene International that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.